STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated June 21, 2003

 

At the end of the week the KSE-100 index closed at 3,307 points, yet another record highest record level. Profit-taking, particularly in HUBCO, did not allow the index to make significant gains during the week. There are two opinions about the future direction of the market. Some analysts believe that the index may breach 3,400 level in next couple of weeks. Other believe that the market has discounted all the good news and correction may take place in the following weeks.

 

 

 

The point of concern is growing investment in COT, particularly in the third and fourth tier scrips. However, the positive point is lower average COT rate. When the COT investment bubbled in the past the average rate crossed 40% and the average rate is still around 12% at present.

The GoP has announced its divestment plan for the first quarter of next financial year and intends to raise Rs 4 billion through further sale of shares of SSGC, NBP and PIA. The indicated percentages are far smaller than the market appetite. The market also awaits the bidding date for PSO. However, some analysts believe that after the transfer of ICP SEMF Fund to private sector and privatization of NIT, the GoP's directly holding in PSO would be confined to around 26%. Can the GoP force the new fund management companies to sell their holding of PSO's shares?

UMER FABRICS

The company has posted Rs 69 million profit after tax for the first half of ongoing financial year as compared to a profit of Rs 28 million for the corresponding period of last year. The company is reaping the benefit of investment in value addition. Sales came down from Rs 663 million to Rs 634 million. However, the decline in operating expenses and financial charges helped in improving the bottom line. Operating expenses declined from Rs 37 million to Rs 24 million. Financial charges also went down from Rs 45 million to Rs 31 million. As a result EPS improved from Rs 1.17 to Rs 2.89. However, the Board of Directors did not approve distribution of any interim dividend.

KOHINOOR WEAVING MILLS

The company failed to benefit from increase in sales. It has posted Rs 93 million profit after tax for the first half of ongoing financial year as compared to a profit of Rs 113 million for the corresponding period of last year. Sales went up from Rs 1,613 million to Rs 2,2467 million. But there was only marginal improvement in gross profit going up from Rs 243.3 million to Rs 245.5 million. Operating expenses went up from Rs 50 million to Rs 81 million. However, financial charges came down from Rs 74 million to Rs 48 million. There was also a decline in other income, going down from Rs 19 million to Rs 9 million. As a result EPS declined from Rs 4.71 to Rs 3.84.

KOHINOOR SPINNING MILLS

The company continued posting loss despite increase in sales and accumulated losses touched Rs 860 million as at March 31, 2003. Two reasons seem to be responsible for the losses, higher cost of goods sold and out of proportion financial charges. The company has posted Rs 23.6 million gross profit on sales of Rs 865 million. Gross profit was not sufficient to take care of operating expenses amounting to Rs 47.6 million. Financial charges amounting to Rs 61.6 million added to loss before tax amounting to Rs 77 million. There seems to be some thing grossly wrong the way company is being managed. It is evident that shareholders cannot expect any return on their investment in the company.

THAL INDUSTRIES

The corporation manages Layyah Sugar Mills. The point of concern is that its accumulated losses crossed Rs 110 million as at March 31, 2003. The corporation has posted Rs 2.9 million loss after tax for the first of ongoing financial year as against a profit of Rs 8.7 million for the corresponding period of previous year. Though, the corporation managed to increase its sales, the hike in cost of goods sold reduced gross profit. Sales went up from Rs 196.5 million to Rs 206.7 million. Gross profit came down from Rs 30.4 million to 17.5 million. Operating expenses also went up from Rs 12.5 million to Rs 14.8 million. However, the erosion in profit was partly compensated due to increase in other income, going up from Rs 24,788 to Rs 2,080,419. EPS for the period under review comes to negative Rs 0.19 as against positive Rs. 0.58 for the corresponding period of last year.

JDW SUGAR MILLS

The company has posted Rs 33.8 million profit after tax for the first half of ongoing financial year as against a profit of Rs 67.5 million for the corresponding period of last year. The story of this decline started from decline in sales, going down Rs 722 million to Rs 441 million. Gross profit went down from Rs 146.8 million to Rs 108.5 million. Operating expenses went up from Rs 14.9 million to Rs 18.9 million. As a result of decline in profit, EPS went down from Rs 3.28 to Rs 1.64.

 

 

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

37.60

35.75

36.70

301,841,000

P.T.C.L.A

27.85

27.25

27.85

294,437,500

Engro Chem

84.50

84.00

84.10

52,241,700

Bosicor Pak

21.60

20.30

20.65

50,171,000

Sui North Gas

35.15

34.10

34.10

46,902,500

P.S.O.

229.05

220.30

229.05

36,832,305

Dewan Motors Ltd

26.40

25.90

26.00

36,197,500

Sui South Gas

22.30

21.40

21.40

14,658,000

Fauji Fert

88.75

87.50

88.70

6,114,400

Shell Pak

408.00

403.00

404.60

1,068,600